Key Points:
- Initial dip in gold came after ceasefire optimism, with spot prices down over 1%.
- Renewed conflict between Iran and Israel could revive safe-haven demand.
- Trump’s reaction to ceasefire violations fuels fresh market uncertainty.
Gold Prices Eye Recovery as Geopolitical Risks Return
Gold, which had slipped to a two-week low on optimism over an Israel-Iran ceasefire, is now poised for a rebound as renewed hostilities shake investor sentiment.
On June 24, spot gold fell as low as $3,325.69/oz or by 1.59% at the time of reporting, following former President Donald Trump’s announcement of a truce between Israel and Iran, a development that initially dampened safe-haven demand. U.S. gold futures mirrored the slide, dropping 1.6% to $3,339.40.
However, the situation swiftly reversed. Israel accused Iran of violating the ceasefire and ordered new strikes on Tehran, reigniting fears of broader regional instability. This geopolitical back-and-forth has made markets increasingly sensitive to headline risk, with gold once again at the center of the risk hedge narrative.
Israel’s Defense Minister, Israel Katz, has ordered “intense strikes” on Tehran, accusing Iran of violating the U.S.- and Qatar-brokered truce, Al Jazeera reports. Iran denied the claim and warned it is ready to respond decisively to any Israeli action. Following which, U.S. President Donald Trump has also tweeted on the ceasefire violations.
Concluion
The collapse of the Israel-Iran ceasefire and escalating tensions have put gold back in the spotlight as investors seek safety. While gold hasn’t yet seen a sharp price rebound, the growing uncertainty in the Middle East has traders on edge, keeping gold well-positioned for upside if the situation worsens.
